Compare Taxes In North and South Carolina 

 

North Carolina

Sales Tax varies by County but averages between 6.25% - 7.5%.

The State portion of the Tax on gas is 30.2 cents per gallon.

Personal Income Tax (effective January 2008) 7.75%

Personal Exemption is $3,200 each

Standard Tax Deduction $3,750 / Married $6,100

North Carolina Retirement Income Deductions (from the NC Dept. of Revenue 10/31/07)

If you received retirement benefits as a former employee of the State of North Carolina or any of its local governments or as a former employee of the federal government and you did not have five years of service with the government as of August 12, 1989, you may deduct the amount included in federal taxable income or $4,000, whichever is less. This deduction also applies to retirement benefits paid to former teachers and state employees of other states and their political subdivisions regardless of the five year service date. If you are married filing jointly and both you and your spouse received federal, state, or local government retirement benefits, you may each deduct up to a maximum of $4,000 for a total of $8,000.

If your federal taxable income includes retirement benefits from a private retirement plan, you may be able to deduct up to $2,000. If you received retirement benefits from more than one private retirement plan, you will not get a separate $2,000 deduction for each distribution. You may only deduct the total amount included in federal taxable income or $2,000, whichever is less. If you received both government and private retirement benefits, your maximum deduction is the total amount included in federal taxable income or $4,000, whichever is less.

An individual is not required to have ceased employment to qualify for the $2,000 deduction for distributions from an individual retirement account or an individual retirement annuity.

If your employer has a structure change and you receive a retirement distribution but do not cease employment with that employer, you do not qualify for the retirement deduction. For example, if company A merged with company B and you continue to work with the merged company, you may not claim a retirement deduction on your State return because you never ceased employment.

The deduction for retirement benefits is allowed only to the extent the benefits are included in federal taxable income. If you elect to roll-over distributions from your retirement plan, you may not take a deduction on your North Carolina return because the distributions are not included in your federal taxable income.

If you received retirement benefits as a former employee of the State of North Carolina or any of its local governments or as a former employee of the federal government and you did not have five years of service with the government as of August 12, 1989, you may deduct the amount included in federal taxable income or $4,000, whichever is less. This deduction also applies to retirement benefits paid to former teachers and state employees of other states and their political subdivisions regardless of the five year service date. If you are married filing jointly and both you and your spouse received federal, state, or local government retirement benefits, you may each deduct up to a maximum of $4,000 for a total of $8,000.

If your federal taxable income includes retirement benefits from a private retirement plan, you may be able to deduct up to $2,000. If you received retirement benefits from more than one private retirement plan, you will not get a separate $2,000 deduction for each distribution. You may only deduct the total amount included in federal taxable income or $2,000, whichever is less. If you received both government and private retirement benefits, your maximum deduction is the total amount included in federal taxable income or $4,000, whichever is less.

An individual is not required to have ceased employment to qualify for the $2,000 deduction for distributions from an individual retirement account or an individual retirement annuity.

If your employer has a structure change and you receive a retirement distribution but do not cease employment with that employer, you do not qualify for the retirement deduction. For example, if company A merged with company B and you continue to work with the merged company, you may not claim a retirement deduction on your State return because you never ceased employment.

The deduction for retirement benefits is allowed only to the extent the benefits are included in federal taxable income. If you elect to roll-over distributions from your retirement plan, you may not take a deduction on your North Carolina return because the distributions are not included in your federal taxable income.

North Carolina Property Taxes

Each County and Town has a different Property Tax rate. Go to The Department of Revenue website at dornc.com

North Carolina Personal Property Taxes: Automobile

Each County and Town has a different Personal Property Tax rate. Go to The Department of Revenue website at dornc.com

South Carolina

Sales Tax (prescription drugs are exempt) between 7% - 8%

Seniors over 85 years of age only pay 4%

The State portion of the Tax on gas is 16.8 cents per gallon

Personal Income Tax is between 0% - 7%

Personal Exemption is $3,200 each (Dependents Under SIX Years of Age during 2007 and a resident for at least part of the year have a Personal Exemption of $3,400)

Standard Tax Deduction $4,750 / Joint $9,500

(Social Security income, Railroad Retirement income, and disability retirement income due to permanent and total disability are Not taxed)

Retirement Income Deductions

Under 65 yrs. of age - A deduction of up to $3,000 of qualified taxable retirement income. Taxpayer and Spouse both receiving qualified taxable retirement income can deduct up to $6,000.

Age 65 or older - A deduction up to $15,000 / Joint $30,000 on any SC income. (Must have been a resident for at least part of the year)

Many persons over 65 yrs of age do not have to file a State return if they meet criteria (contact South Carolina's Department of Revenue for criteria)

Military Pay - National Guard and Military Reserve Pension or Retirement is not taxed but Survivors follow Federal Tax rules.

Residential Property

(Note: You must go to the County Tax Office and provide proof of South Carolina primary legal residency to receive the lower assessment rate. Each time you move to another taxable property within the State you must repeat the process)

The market value of a legal residence and up to five acres of surrounding land is assessed at 4%. The millage rate of the local government is then applied to the assessed value resulting in the tax liability. The millage rate is set by local governments and varies widely throughout the state.

The first $100,000 in fair market value of a primary residence is exempt from school operating costs.

Some examples of how this property tax relief benefits taxpayers: Based most recent property tax rates, a $100,000 home in the city of Greenville would be taxed at $1,186. With the exemption, the homeowner would see a savings of $581, for a lower tax bill of $605. In the city of Columbia, without property tax relief, the tax on a $100,000 home would be $1,418. After tax relief, the property tax is reduced to $867, a savings of $551. The property tax relief will vary among school districts depending upon the millage for school operating costs.

If you have established one-year residency and you are 65 or older, you are eligible for a homestead exemption of $20,000. For the same home in the city of Columbia calculated previously, the homestead exemption would offer an additional savings of $173, for a total tax of $694 on a $100,000 home.

The assessment ratio on a second home or vacation home is 6%. The property tax relief does not apply to a second home.

Vehicle Property Taxes

Personal property tax is collected annually on cars, trucks, motorcycles, recreational vehicles, boats and airplanes, based on their fair market value. If you own a $10,000 car, based on the average millage rate, your personal property tax would be $268.

For information about personal property tax on motor vehicles, call the auditor's office in the county where you plan to live.